It is very important for entities to be able to track their expenses. A growing portion of many entity's expenditures are related to computers, including costs for computers, peripherals, and support personnel. In the past, entities purchased or leased computers, servers, and the like on a fixed-price basis. That is, an entity would pay a fixed price for the use of a computer, regardless of how much they actually used the computer. An entity would also incur the salary costs for certain people to operate and maintain the computers and the facility costs for housing the equipment.
Recently, a trend has emerged with computing providers selling computing time on a unit basis. In a manner similar to electric companies selling electricity by the amount of electricity used, computing providers sell computing power based on the amount of computing time used. There are various benefits for the users of such a utility type pricing system. For example, entities may have fluctuating needs wherein, one week, the entity may have large computing needs, but the next they may not have large computing needs. In such a situation, under traditional pricing, the entity would be forced to buy enough computers, servers, and the like to cover their peak needs.
Under traditional pricing schemes, during slower times, the computers and servers are not used as often, but payments related to the computers still must be paid. If the entity tries to compensate by purchasing fewer or less expensive computers and servers, they may encounter the opposite problem—they may have adequate computing power during slow times, but inadequate computing power during peak times. If the entity is dependent on adequate computing power being available at all times (for example, the entity runs an e-commerce business or otherwise desires 24-hour access by customers), the lack of computing power may result in lost business to the entity. The utility type pricing scheme reduces these problems, as short-term spikes or dips in computing needs are compensated for by the resultant spike or dip in computing costs.
However, under the utility pricing scheme, it may be more difficult to plan for future costs because, for example, peak times may not always be predictable. Another reason is that it is not always easy to determine how the computing time is being spent and where it is being spent. In certain instances, computing providers using utility pricing do not separate costs per job, merely presenting a bill periodically. Therefore, an entity that has a dozen internal groups each using utility pricing may not be able to determine which groups are in need of more computing power or less computing power. In addition, with the integration of systems and the evolution of user interfaces, it becomes difficult for users to perceive how much processor time they are using, thus making it easier for a user to inadvertently spend too much on computing.
With both traditional pricing models and utility pricing models, it is very important for organizations to limit costs in order to remain competitive in the marketplace. But it is also important to maintain sufficient computing power to be able to handle the variety of different tasks being performed.
It is desirable for an entity to be able to more easily track past expenses and forecast future expenditures.